China manufacturing PMI holds steady In January

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The manufacturing sector in China continued to expand in January, and at a steady pace. The Caixin/Markit Manufacturing Purchasing Managers’ Index (PMI) was at 51.5 in January, unchanged from December.

December’s reading was the highest in four months and anything above 50 is considered growth while a figure below that number points to contraction.

The country's vast industrial sector has reported strong earnings growth this year, thanks to a year-long construction boom that has fueled demand and prices for building materials.

The non-manufacturing purchasing managers' index (PMI) came in at 55.3 this month, up from 55 in December and 54.6 in the same period last year, the National Bureau of Statistics (NBS) released on Wednesday. Analysts expect some softening in expansion this year with continued home purchase curbs and de-leveraging efforts.

The Caixin PMI is a closely-watched gauge of nationwide manufacturing activity, and tends to focus on small and mid-sized firms which are believed to be more export oriented.

“The manufacturing industry had a good start to 2018. Going forward, we should keep a close eye on the stability of the demand side,” said Zhengsheng Zhong, director of Macroeconomic Analysis at CEBM Group.